Take a look at your portfolio…

Examine what you own, and see if you can spot the error.

Now, I don’t know exactly what’s in your portfolio. But if you’re like almost all investors, there’s a glaring problem: Almost all of the stocks you own are from the U.S.

If you aren’t American, that’s probably not true. Instead, most of the companies you own are from wherever you live.

This is called “home-country bias.” And while it might not seem like a problem, it can cause you to miss out on fantastic opportunities setting up overseas.

Today, you can catch one of those opportunities. It’s in a market often forgotten by those in the U.S. But history tells us it’s setting up for a double-digit rally.

Let me explain…

Today’s mystery market is one few Americans ever consider… Japan.

Japan’s market is surging after a long “cooling off” period. From February to mid-August, the Nikkei 225 Index fell 11%.

Then, it started to take off once again. The index is back on the rise. And it recently rallied for eight straight days.

That might not sound like much… But history tells us that similar strings of up-days have led to double-digit gains in the past.

That’s because consecutive up-days highlight a breakout. They happen in a market that’s likely entering the next phase of a rally. And they often indicate that the trend is accelerating.

If you catch these breakouts in real time, they can lead to big outperformance. And that’s the opportunity we have in Japanese stocks today.

As we said, the Nikkei 225 was recently up for eight consecutive days. It’s breaking the downturn that has been in place for the past six months. Take a look…

You can see the trend’s rapid shift in the chart above. The sharp rise in the Nikkei 225 is signaling the start of a new uptrend.

Importantly, similar breakouts have led to major outperformance in the past. And a 13% gain is possible over the next year. Check it out…

Japan’s market has rallied 5% per year since 1970. That’s not a bad annualized return over a half-century. But today’s breakout gives investors a chance to do even better…

Similar setups have led to roughly 4% gains in three months, 6% gains in six months, and 13% gains in 12 months.

If this new trend continues, double-digit returns are possible based on history. And the simplest way to take advantage of it is by owning the iShares MSCI Japan Fund (EWJ). It’s a simple one-click way to invest in the Japanese market.

I doubt this is an opportunity you’ve considered. But that’s home-country bias at work.

If you don’t take hold of it, it’ll run your portfolio. But moving some money outside of the U.S. is a smart move for any long-term investor.

Right now, owning Japanese stocks through EWJ is a smart way to do it.

Good investing,

— Chris Igou

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Source: Daily Wealth